The Supreme Court has dismissed appeals by Michael Bailey and Thomas Bailey and by the Director of Corporate Enforcement in proceedings seeking to disqualify the men from company management over Bovale Developments Limited.
The judgment, delivered by Denham J. on 14 July 2011, concerned preliminary disputes about evidence and the Director’s use of PricewaterhouseCoopers (PwC). It did not decide whether either appellant should be disqualified.
The appellants challenged the High Court’s decision that the Director could use PwC to investigate Bovale’s books and records under section 12(6) of the Company Law Enforcement Act 2001. They argued that this amounted to an unlawful delegation and required a written instrument under section 13. The Supreme Court rejected that challenge. It held that PwC, as a partnership, could qualify as a “person” employed to assist the Director, and that its work did not amount to an impermissible delegation. The Director remained responsible for deciding how to proceed after receiving PwC’s reports.
The Director’s cross appeal concerned material struck from affidavits filed to support the disqualification application. The Court ruled that extracts from reports of the Tribunal of Inquiry into Certain Planning Matters and Payments could not be admitted, even on a prima facie basis. It applied the principle in Goodman International v. Mr. Justice Hamilton that tribunal findings cannot form material on which a court relies in litigation about the same matters.
The judgment described PwC reports concerning Bovale’s books for the years ended 30 June 1997 and 30 June 1998. Their conclusions, recounted from an affidavit, included that the accounts materially misstated transactions and that payments to the appellants were not properly recorded. These were report findings presented in support of the Director’s case, not findings made by the Supreme Court on the disqualification application.
The Court expressed no opinion on the admissibility of information from the Revenue Commissioners or memoranda by Bovale’s auditor, holding those issues moot because the case had been sent to a plenary hearing in the High Court. It also found merit in deciding the tribunal-report question as a preliminary issue, while noting the need for careful case management.
The Supreme Court dismissed both the appeal and cross appeal. The underlying disqualification proceedings remained for determination at the High Court plenary hearing.